Monday, April 11, 2016

Disruptive Innovation and India's ISRO ..

ISRO has of late become a force to reckon with,
displacing the world's top industrial giant China !
"A disruptive innovation is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market leaders and alliances". 

 The term was defined and phenomenon analyzed by Clayton M. Christensen beginning in 1995. - ( 

Maxwel Wessel in his paper "How Big Data is changing disruptive innovation" , Jan '2016, HBR, lists the characteristics of any disruptive information. He also speaks of how Big Data based innovation is going to make a big impact on the disruptive innovation scenarion, when existing services will be made cheaper, more accessible and made on a business model with structural cost advantages.

ISRO's high end offerings ..
Based on Clayton Christensen's paper " What is disruptive Innovation" in HBR of Dec '15, there are several characteristics for disruptive innovation. Disruptive innovations are primarily focussed on the low-end foothold markets ( where incumbents are too busy giving value to their existing customers and neglect the low value customers) and in new market footholds (finding new markets where incumbents are busy serving old customers and markets). Disruptive Innovations are initially of low quality and escapes the attention of the incumbents till they improve in quality and quality catches up with the best in the field. When new customers find the quality of the disrupters good enough, the prices are driven down as a result.

Indian space agency ISRO ( Indian Space Research Organisation) is in the throes of entering into a phase of disruptive innovation by offering low cost launches of satellites for western advanced and developing nations. Incumbent provider US' NASA is still not aware of the threat posed by ISRO  and is busy serving its existing customers, probably at better quality and more perfect launches. NASA is unaware of the disruptive potential of ISRO's satellite launching capabilities. 

ISRO's Mangalyaan, the Mars Orbiter Mission, is the other disruptive mission which belied all odds to launch India's first deep space mission. While NASA is too busy overlooking ISRO's brilliant achievements, and concentrating on its other deep space missions, the low cost innovative approach ISRO deployed to get to Mars, and other future missions to Mercury and Kuiper belts resembles all characteristics of how disruptive innovations disrupt the system as a whole.

The other characteristics of Disruptors is that they tend to get the business model right than just the product or service. 

Kochi international airport turns 100% solar ..
Another instance of disruptive innovation..
Kochi International airport in Kerala, in the South of India becoming the first and only international airport to run completely on solar energy (first energy neutral international airport in the world) is another instance of disruptive innovation. Kochi airport is looking to redefine the area of energy harnessing world-over, especially in super critical applications, the renewable way, bringing in many benefits like low cost, low maintenance, the most important of it being zero carbon footprint..

Prof Clayton Chritenssen's (Harvard Business School) site dedicated to Disruptive Innovation. Click here to go to the Clayton Christensen Institute to understand more on Disruptive Inovation .. Prof. Christensen's article in HBR Dec 2006 on Disruptive Innovation in the social sector ..

While discussing on disruptive innovation, one great player not to be forgotten is Elon Musk.  This South African-born, Uty of Pennsylvania engineer, Elon Musk, through one of his company Tesla, is trying to redefine the way we commute using electrical fuel cells. Through the other company SpaceX among others, he is trying to ensure that space travel can not only be undertaken by governments but can be undertaken by private individuals too. While TESLA is solely incremental innovation, (high costs are preventing acceptance of electric cars among the masses), SpaceX is definitely disruptive innovation. While he has been partly successful with SpaceX, in ensuring material replenishments for the International Space Station as the first private individual initiative into space, he may face more bottlenecks and opposition before the world accepts private ventures to outer space ..

Listen to Elon's TED talk here ..

The interesting fact to note is that all the innovations that come out of US and Europe are unable to catch up with the costs of innovations from the eastern giants of India and China. Frankly speaking, at least for the next couple of centuries, the advanced nations of the West will not be able to compete with the Asian super powers on costs. None of the Tesla innovations will have a real impact in the whole world, unless costs are seriously taken care of.

In another writeup, in the 10 characteristics of disruptive innovations, Bernadette Jiwa talks of the important points to be kept in mind while attempting disruptive innovation. 

1. Start with a purpose and work on small ideas instead of big ones . 
2. Observe what is being done and not what is being said is being done.
3. use data extensively, to learn of trends. Big data has a role to play here. 
4. be more responsive to customer needs and behaviour
5. look at what the customer really needs, not what he claims to need
6. try to connect points to arrive at a whole
7. create value in everything one does
8. disrupt people, not industries or systems - how people look at the world
9. try to change the fringe group first and then attempt the core group later
10. first understand the fact, then attempt the obvious ..

Disruptive innovation is going to make a big impact on the way businesses and organisations from around the world are going to influence humanity and development in the coming centuries.


No comments:

Post a Comment

Ambani and cautious days ahead for Indian economy

Reliance is planning slowly to be a zero debt company by 2020.  As an overtly safe move from India's richest man, is it reflective of...

My popular posts over the last month ..